Single Currency Experiment Risks Rising.

Hitman Actual

Amberman wrote: »

Whats wrong with the article....specifically?

Firstly, when you said "False alarm...FU Ireland!", what was that supposed to mean as regards the article? I still don't get it. But the main problem is that, like I said, there's nothing of substance at all in the article. It's just the same tired line that Pritchard has been spouting for ages now, but it's even more unclear as to what exactly he's attacking as regards the EU there. It's certainly nothing new. Now, there's no question that you're much more versed in economic matters than I am (and I've liked your posts in this thread while being on the opposite side of the fence), but I just don't really see the significance in anything he's saying there.

Amberman

Hitman Actual wrote: »

Firstly, when you said "False alarm...FU Ireland!", what was that supposed to mean as regards the article? I still don't get it. But the main problem is that, like I said, there's nothing of substance at all in the article. It's just the same tired line that Pritchard has been spouting for ages now, but it's even more unclear as to what exactly he's attacking as regards the EU there. It's certainly nothing new. Now, there's no question that you're much more versed in economic matters than I am (and I've liked your posts in this thread while being on the opposite side of the fence), but I just don't really see the significance in anything he's saying there.

So you've no issue with the facts in the article, you just don't like the guy or what he has to say?...fair enough.

The FU Ireland means that it looks like we could be on our own in this sh1t storm.

Scofflaw

Amberman wrote: »

So you've no issue with the facts in the article, you just don't like the guy or what he has to say?...fair enough.

That's not actually the problem. The problem is that Pritchard says the same thing whatever happens. A Pritchard article that contains what Pritchard always says is therefore essentially a content-free article as regards what is actually happening.

cordially,
Scofflaw

Amberman

Fair enough view point...

I got quite a bit of news out of it...thats why I posted it. But this is obviously old news to you guys, so I apologise for putting up facts that you are obviously aware of.

FYI....I didn't know Spain was facing nearly 20% unemployment, and that industrial output down 24%. Staggering numbers.

"Even less lucky are those such as Spain and Ireland that have surrendered policy to a body that is deaf to their pleas and constitutionally obliged to ignore the welfare of their particular societies. They face crucifixion."

Admittedly, this isn't really news....The dogs in the street have figured this one out already.

Yeah, I kinda see your point.

Hitman Actual

Amberman wrote: »

So you've no issue with the facts in the article, you just don't like the guy or what he has to say?...fair enough.

The FU Ireland means that it looks like we could be on our own in this sh1t storm.

What facts, though, Amberman? Maybe I just don't 'get' it, but I really find the article to be quite vague as regards what he's attacking in the EU. And to echo what Scofflaw said, if it rained tomorrow, Pritchard would blame it on EMU. The guy is a hack.

K-9

His articles seem to consist of "Britain is in bad shape, but thank God we aren't in the Euro!".

thebman

Amberman wrote: »

OR][/COLOR]
Even less lucky are those such as Spain and Ireland that have surrendered policy to a body that is deaf to their pleas and constitutionally obliged to ignore the welfare of their particular societies. They face crucifixion."

Admittedly, this isn't really news....The dogs in the street have figured this one out already.

Yeah, I kinda see your point.

IMO, this isn't a fact. I'm sure they are aware of what is going on in Ireland. They may not be listening to what people are telling them to do for Ireland but they most likely know what is going on here.

Amberman

@Hitman...the facts in the article...figures re: Spains unemployment, industrial production drops...that sort of stuff.

@He who Scoffs...Hes a Euro Sceptic...you don't like him or his writing...shiver me timbers!!

@theBman..."deaf to pleas" means they are listening to whats going on, but not responding to requests for help in the way that is being asked of them...so pretty much what you said. Whats yer point? What isnt a fact?

@K9...you are correct. This is precisely his point. He is all for the ability of the UK to set its own monetary policy specifically for its own situation. His point is that Ireland and Spain dont have this luxury anymore and will likely get "crucified" as a result (dont like the religious bit...Jesus is my favourite fictional charachter).

Amberman

K-9

Amberman wrote: »

@Hitman...the facts in the article...figures re: Spains unemployment, industrial production drops...that sort of stuff.

I think Spain and indeed Ireland are reverting to their normal levels. Remember the last 5 years was a bubble, not a boom, same as the UK.

Amberman wrote:

@K9...you are correct. This is precisely his point. He is all for the ability of the UK to set its own monetary policy specifically for its own situation. His point is that Ireland and Spain dont have this luxury anymore and will likely get "crucified" as a result (dont like the religious bit...Jesus is my favourite fictional charachter).

You mean like Iceland?

Look, nobody knows what is the correct approach. Everybody, GB, USA and the EU are shooting in the dark.

Saying GB is better than the EU is a pointless exercise until at least 2/3 years time.

Hitman Actual

Amberman wrote: »

@Hitman...the facts in the article...figures re: Spains unemployment, industrial production drops...that sort of stuff.

Okay, fair enough. But answer me this so- is there anything convincing in the article to say that "Spains unemployment, industrial production drops" are due to membership of the EMU? There are a few facts in the article, but I don't see that they add any substance to Pritchard's on-going argument that membership of the EMU is like selling your soul to the devil. Is it not possible that Spain were just idiots, like we were?

Amberman

K-9 wrote: »

You mean like Iceland?

Look, nobody knows what is the correct approach. Everybody, GB, USA and the EU are shooting in the dark.

Saying GB is better than the EU is a pointless exercise until at least 2/3 years time.

The Icelandic Krona and currecny speculation was the issue with Iceland...special case. Here you go.

I dont agree that its a pointless exercise to say that having control of monetary and fiscal poilcy is pointless until the outcomes are known. The UK is aiming squarely at the UKs target on the global rifle range. The EU has multiple targets and is concentrting its fire on the biggest ones, so shots arent being fired by the EU on behalf of smaller countries. If Ireland still had its own gun, it would be shooting at its own target.

Chance of hitting its own target with a few rounds is therefore increased.

Some bright spark will jump up and say that we gave up our individual rifle for a machine gun held by the EU and this is true. Pretty tricky to aim a machine gun though, as we're finding out. Smaller targets are hit less often as ammo runs out too.

K-9

Amberman wrote: »

The Icelandic Krona and currecny speculation was the issue with Iceland...special case. Here you go.

Fitch Ratings Firm wrote:

According the analysis released by Fitch, the ratings firm:

"Take into account Iceland's macro-prudential risks, including rising inflation, rapid credit growth, buoyant asset prices, a steep current account deficit and escalating external indebtedness. For [KB-bank, Landsbanki and Islandsbanki] these risks are offset to some extent by the banks' large capital bases, with Tier 1 ratios of 9.4%, 11.9% and 9.9% respectively at end-2005, and by the significant geographic diversification of their loan portfolios, with foreign lending representing between around 35% and 70% of the banks' loan books at end-2005."

Foreign lending was a big part of their October 08 crisis, huge foreign debts a tiny country couldn't guarentee.

Deregulation started all this.

bbc wrote:

The Icelanders had all the banking regulations of the European Union because of their European Economic Area membership. What they failed to implement was the necessary supervision or enforcement of banking regulations.
The government, the Central Bank and the financial regulator at times seemed to act as cheerleaders for the banks, not as responsible authorities.

Sound familiar?


http://news.bbc.co.uk/2/hi/europe/7852275.stm


Britain has similar problems, just not as high.

Amberman

Hitman Actual wrote: »

Is it not possible that Spain were just idiots, like we were?

Sure it is...and I think you're right to a degree.

What is being said is that the power to recover from their idiocy is now out of their hands. Its a bit like jumping into a swimming pool drunk, with your hands and feets tied.

Better to have your hands and feet free in that scenario...yes?

Hitman Actual

Amberman wrote: »

Sure it is...and I think you're right to a degree.

What is being said is that the power to recover from their idiocy is now out of their hands. Its a bit like jumping into a swimming pool drunk, with your hands and feets tied.

Better to have your hands and feet free in that scenario...yes?

Been away from Boards for a few days.

Yes, I'm sure it would be. But that isn't really the essence of the discussion for me. What I want to know is, on balance, are we better of being in EMU or not? And not just as things stand in the current economic situation, but over a 10 or maybe even 20 year period, where you go through various stages of economic cycles. If someone carried out a thorough non-biased cost-benefit analysis of being in EMU, and found convincingly that we would be better off out, then I'd be all for leaving it. But I've never read anything to convince me eitherway, and Pritchard with his one note tune has absolutely never come close to doing it.

Amberman

Yeah, its pretty tricky to predict into the future well.

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So stay in till you get a neat little tick box answer, regardless of pain in the now that can be directly attributed to membership?

Do you see why thats pretty silly?

Hitman Actual

Amberman wrote: »

So stay in till you get a neat little tick box answer, regardless of pain in the now that can be directly attributed to membership?

Eh... what? That's not what I'm saying at all (although I've no problem with short-term pain for the greater good in the long-term). For a start, we've already been in Stage 3 EMU since 1999. I was under the impression that economics was a proper mathematical discipline- all I want is a reputable, non-biased analysis of whether EMU is good for Ireland, taking into account all variables whether positive or negative. Your position seems to be based on one negative variable only: lack of control over interest rates. But if we didn't have the currency stability achieved through EMU, would our current situation be worse off had we gone through a currency crisis like in the early '90s (a crisis which ironically strengthened the political will for EMU)? Or would Ireland and other member states be in a much worse position if countries hadn't had to improve budget deficits, debt ratio's, etc, through the Growth and Stability Pact? [As an aside, I know the Growth and Stability Pact has many problems as well, but again that's something I want to see analysed.]

So is it silly to want an analysis of the situation taking into account all the variables?

Amberman

Hitman Actual wrote: »

Eh... what? That's not what I'm saying at all (although I've no problem with short-term pain for the greater good in the long-term). For a start, we've already been in Stage 3 EMU since 1999. I was under the impression that economics was a proper mathematical discipline- all I want is a reputable, non-biased analysis of whether EMU is good for Ireland, taking into account all variables whether positive or negative. Your position seems to be based on one negative variable only: lack of control over interest rates. But if we didn't have the currency stability achieved through EMU, would our current situation be worse off had we gone through a currency crisis like in the early '90s (a crisis which ironically strengthened the political will for EMU)? Or would Ireland and other member states be in a much worse position if countries hadn't had to improve budget deficits, debt ratio's, etc, through the Growth and Stability Pact? [As an aside, I know the Growth and Stability Pact has many problems as well, but again that's something I want to see analysed.]

So is it silly to want an analysis of the situation taking into account all the variables?

Yeah...an analysis of the future...its far too difficult to do with any degree of certainty.

The variables are unknown. Two variables we can say for certain since 1999 are.....

1. property boom
2. Property bust

Out of our control interest rates caused the boom.

Lack of control over the interest rate is hampering us from recovering quickly from the bust.

Would we have been in the same situation as Iceland if we were out of monetary union? Yes if...no but...again...too complex to answer.

Its all too complex to predict...see list above for famous predictions made by experts that havent come to pass.

As for the dismal science...well...its dismal...and if it was purely mathematical, we'd all be trillionaires. Complexity and unknown variables makes maths suck. Stock trading is way more difficult that high stakes poker, which is way more difficult than chess...I'd put stock trading at 100 times more difficult than chess. They can make computers that can beat chess, but computers cant predict the market accurately before key players adapt and loot...LTCM.

The reason is incomplete info. To do what you are saking is impossible since the level and frequency of unknowns and dependents on external factors make the model worthless.

They cant even get a one dimensional decision like interest rates right. Up, down or static. What chance does a model predicting what monetary union will look like in n years have?

Zippo.

Hitman Actual

Well, if economics is truly the black art you're painting it to be, than I genuinely despair. I still fail to see the logic of making a decision based on one variable, and one variable only. [But maybe that's just the engineer in me, where trade-offs are everything in my discipline.]

Amberman

Hitman Actual wrote: »

Well, if economics is truly the black art you're painting it to be, than I genuinely despair. I still fail to see the logic of making a decision based on one variable, and one variable only. [But maybe that's just the engineer in me, where trade-offs are everything in my discipline.]

Spoken like a true engineer. Unfortunately, we don't have the mathematical certainty that you have. The proof of that is all around you.